Bitcoin’s Present (and Future) Role in the American Economy
- August 23, 2018
- Posted by: Mike Brown
- Category: Personal Finance
The 21st century has brought about too many transformative ideas to count. It feels like with each passing month a new technology comes out that pushes another century-old industry into obscurity.
Advancements have become so commonplace that it comes as no surprise that even physical currency, a seemingly irreplaceable institution, has a new-age competitor quickly approaching in the rearview mirror.
Bitcoin, a worldwide, decentralized cryptocurrency and digital payment system, grows in popularity and relevance by the day. Bitcoin remains the clear leader in the industry, but there are now hundreds of different types of virtual currencies.
As proof of the rising popularity of virtual currencies, LendEDU recently discovered that virtual currency complaints are up 5,971 percent in 2017 as compared to last year. As the volume of users investing through some of the top bitcoin exchanges increases, so too has the volume of complaints.
A new poll commissioned by LendEDU revealed some interesting trends regarding the present, and future, role of Bitcoin in the American economy.
General Bitcoin Trends
Most Americans Have Heard of Bitcoin, Especially Millennials
Acting both as a screener question and as a gauge of Bitcoin's relevance, LendEDU asked 1,000 Americans the following: "Have you heard of Bitcoin?"
The vast majority of Americans, 78.60 percent, have indeed heard of Bitcoin. Meanwhile, 21.40 percent of respondents have not heard of Bitcoin.
Not surprisingly, younger Americans were more likely to have heard of Bitcoin as compared to their older counterparts. 86.67 percent of respondents between the ages of 18 and 24 have heard of Bitcoin, while only 75.93 percent of respondents ages 55 and older have heard of Bitcoin. It was a consistent trend that as respondents got older, their likelihood of hearing about Bitcoin went down.
So, Bitcoin has certainly carved out a name for itself in the U.S, but that does not necessarily mean people know much about the virtual currency, which is evident in the next question.
Owning Bitcoin Is NOT Illegal, Although Some Think So
We asked the 78.60 percent of respondents that had heard of Bitcoin (786 total respondents) the following question: "True or False: Is owning Bitcoin in the United States illegal?"
10.69 percent of our respondents incorrectly believed that owning Bitcoin in the U.S. is illegal, while 41.6 percent knew that owning Bitcoin is perfectly compliant with U.S. law. The most surprising result of this poll was that the plurality of respondents, 47.71 percent, were unsure if Bitcoin was legal or not to own in the U.S.
This will be one of the biggest challenges facing Bitcoin, and all virtual currencies, if they want to challenge physical currency for consumer preference.
It appears that there is a "dark-web" stigma attached to Bitcoin. Most people know what Bitcoin is, but they also associate Bitcoin as a mechanism for conducting suspicious behavior on the web. Of course, the name "cryptocurrency" certainly does not help Bitcoin's image, as that description makes it sound like you are evading the government.
The fact of the matter is that Bitcoin is not illegal to own in the U.S. and only through consumer education and hands-on experience will the virtual currency drop its "dark-web" image.
Bitcoin Ownership is Low, But Should Rise in the Future
The 786 poll participants that had heard of Bitcoin were posed this question: "Do you currently, or have you in the past, owned Bitcoin?"
Only 13.99 percent of respondents said that they either currently own Bitcoin or have owned the virtual currency in the past. The majority of respondents, 85.37 percent, have never owned Bitcoin. Another 0.64 percent preferred not to say.
Interestingly, the numbers jumped a bit when respondents were asked to reveal their future Bitcoin intentions. 17.18 percent of poll participants answered that they "plan on investing in Bitcoin as an asset for the future." The majority of consumers still have no intentions to own Bitcoin even in the future, but this time it was only 54.58 percent. Additionally, 28.24 percent of respondents do not yet know if they will invest in Bitcoin in the coming years.
The interesting trend between the two column charts above is the discrepancy involving the people that answered "no" to either of the two questions. The drop-off indicates that there is a decent-sized contingent of people out there that are open to investing in Bitcoin if they learn more about it and decide that the virtual currency is a worthwhile investment. Convincing the uncertain consumers that Bitcoin is legal, safe, and valuable will be the key to Bitcoin gaining many more investors in the future.
The Plurality of Consumers Are Open-Minded About Bitcoin
Going off of the above analysis, the 786 American consumers that had previously heard of Bitcoin were asked the following: "Would you be open to the idea of using Bitcoin for transactions and purchases?"
This poll question provides more proof that most Americans are willing to give Bitcoin a try, but they most likely need to know more about how the virtual currency operates.
First, the plurality of respondents, 39.57 percent, say that they are open to using Bitcoin for transactions and purchases. In fact, the lowest percentage of consumers, 26.34 percent, are not open to using Bitcoin. Further, 34.1 percent are unsure, which probably means they need to understand a bit more about Bitcoin.
If you assume at least some of the undecided folks become open to using Bitcoin, the numbers become overwhelmingly favorable for the virtual currency. Although it has been reiterated many times over in this report, this poll proves that with a little more education and understanding, Bitcoin could see a huge surge in American consumption in the coming years.
Age-Specific Bitcoin Trends
The Younger the Consumer, the More Likely to Invest in Bitcoin
A general theme that developed from our poll was that younger Americans were way more likely to own Bitcoin, to invest in Bitcoin, and to be open to using Bitcoin for transactions. There was nearly a perfect correlation between age and a respondent's likelihood to be involved in the virtual currency. However, one age cohort broke the mold slightly; those between the ages of 25 and 34 were the most likely to invest in Bitcoin as an asset for the future, or to be open to using Bitcoin for purchases.
Just like many transformative ideas, younger consumers showed more of an affinity towards the idea of investing in Bitcoin and using the virtual currency for transactions. Many older Americans already have their minds made up that they will not be getting involved with Bitcoin. Judging from this data, as the years go by and younger Americans develop more spending power, you can expect Bitcoin to become more and more prevalent in the American economy.
Gender-Specific Bitcoin Trends
Males More Likely to Be Involved With Bitcoin
One of the more interesting developments from our poll was that male respondents were much more likely to have either owned Bitcoin or to be planning to invest in the cryptocurrency. Unlike the age-specific trends that arose from this poll, this gender-related trend is much more difficult to put a finger on. But, the data is interesting nonetheless.
This poll was commissioned by LendEDU and conducted online by polling company OnePoll. In total, 1,000 American consumers ages 18 and up were polled. The first question asked respondents the following: "Have you head of Bitcoin?" The respondents that answered "yes" were then the ones that were included in the data pertaining to the remaining questions. Respondents that answered "no" were still able to complete the poll but their votes were not counted in the analysis. OnePoll was able to age and gender voter breakdown. The poll was conducted over a two-day span from August 30, 2017 to August 31, 2017.
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